fb pixel


Monica Wofford, CSP, is a leadership development expert and author of Contagious Leadership and newly released, Make Difficult People Disappear.

Did you know that poor leadership costs you more than it would to hire an additional employee?

Poor leadership is costing you. Keeping poor performing leaders on your team is costing you more than you think. There are the less measurable costs of time, effort, energy drain, and drama that might exist and then there are the cold hard facts. Poor leadership costs into the thousands. Here are a few calculations you want to run to find out just how many it’s costing you.

Employee Costs

Bad leaders can make good employees leave and mediocre employees perform worse. Here are the potential numbers:

Average cost to rehire a new employee: $5,000.00 (not including time)            

Average downtime cost to train employee with $30,000 salary: $2,307.00 (30000/52, *4 weeks)                                                                                                

Sub-Total: $7,307.00

Team Costs

Let’s say that poor performing leader has a team of ten people and half of them are unhappy. Do you think that unhappiness or discontent and time spent talking about it in the break room is costing you anything? Let’s see with these numbers:

Average downtime of 5 stressed employees with $30,000 salary: $23,070.00 (30000/52, *8 weeks *5)            

Lost business from employee resentment or sabotage: $8,000.00 ($1K*8 weeks as an example) 

Sub-Total: $31,070.00

Future Leader Costs

Not only are there current costs with the poor performing leader, but there are future costs when the new leader has to fix what was left behind. That calculation involves about the same amount of time a stressed out employee will be unproductive when led by a poor performer, but the salary is a bit different, so the numbers climb quick:

Average downtime cost for new leader ($80,000 salary) to fix old problems former leader left behind: $6,154.00 (80000/52, *4 weeks)

Grand Total Potential Cost of Poor Performing Leaders:  $37,224.00

That’s more than enough for you to hire an extra employee! And, that number is simply for one poor performing leader with a team of ten over an 8 week period. If the problem has persisted for months and the team is larger, so will be your numbers. If that bothers you, it might be time to take some serious action. However, let’s be real. No one is suggesting you throw out the baby with the bath water here. Just because a leader is a poor performer or not effectively leading their team in the way that reaps results, doesn’t mean you immediately “free them up for new opportunities”. Instead, there’s likely something good about what they do. Find that and develop it. Give them the training, coaching, self-awareness and development you see they need and be the leader who leads them to succeed, instead of the one who pays if they choose not to play.

I’m Monica Wofford, and that’s your Monday Moment. Have a great Monday, an even better week and of course, stay contagious!

Your leadership style and strengths change how you lead and are perceived by others. Find out how you lead with this quick online assessment.

Your Style?